British stores giant looks for retail partners in Hongkong and China

LITTLEWOODS, Britain's largest privately owned company, is looking to invest heavily in Hongkong and southern China.

The British chain store operator has been holding talks with potential joint-venture partners with a view to opening retail outlets in the territory and southern China.

It is believed department stores could also be opened in Taiwan and South Korea.

Littlewoods, which has an annual turnover of GBP4 billion (around HK$44.92 billion), also said yesterday it planned to double the volume of products it sourced from this region over the next three years.

The group already imports goods worth GBP400 million at factory prices each year through Hongkong to sell in its 200 British stores and from its six mail-order catalogues. Half of this is manufactured in Hongkong.

Last Thursday the board of the Littlewoods Organisation formally decided to set up a new subsidiary through which to operate its foreign interests, Littlewoods International.

A representative group of Littlewoods' owners flew to Hongkong last night for the new company's first board meeting, due today.

It is to be chaired by Sir Desmond Pitcher, the retiring group chief executive.

The new company will be based in Singapore, even though management said the vast majority of its money would be invested in Hongkong and China.

Littlewoods management was keen to play down that it had chosen Singapore as a base ahead of Hongkong, even though the group has had a representative office in the territory since 1989, charged with sourcing goods to import direct so as to avoid agents' fees.

However, it said there would be a significant expansion of its Hongkong offices to manage its increasing business in the region.

It is also buying offices in Jakarta and Manila and may also open an office in Shenzhen to oversee its China business.

Representatives of the owners are due to travel to Shenzhen tomorrow to host a lunch with the city's mayor, during which they intend to discuss their plans.

Mr Barry Dale, group chief executive-designate, and Mr Prodip Guha, the new company's chief executive, said establishing Littlewoods International was the most important step the group would be making in the 1990s.

Mr Guha said: ''We have deliberately chosen Hongkong as the venue for this first-ever board meeting to underline our confidence in its future.

''China and Hongkong are targeted as Littlewoods' most important development area.'' A company spokesman said the group had already begun holding talks with a number of possible local joint-venture partners with a view to breaking into the retail sector in the region.

In April last year, Littlewoods reported record sales and profits in its main mail-order, retail and football pools businesses.

Pre-tax profits rose to GBP97 million for 1991 from GBP94.8 million in 1990 and turnover was up nine per cent at GBP2.59 billion.